Meta is in a decline as it reports a downturn in Q3 2022 profits, exacerbated by substantial financial losses in its Reality Labs division centered around the metaverse.
In Brief
Meta's earnings from Q3 have been officially released.
The company's net profits plummeted by over 50%, alongside a 19% uptick in expenses.
Reality Labs, Meta's division for the metaverse, reported a staggering loss of $3.67 billion.
Meta disclosed its financial report For Q3 2022, Zuckerberg's tech venture continues to face hurdles, particularly in its Reality Labs division focused on the metaverse.
The earnings report revealed a decline in sales for the first time since Meta's initial public offering, leading to a revenue drop of 4%—from $29 billion to $27.7 billion compared to the previous year. Additionally, net income plummeted over 50% since 2021, largely due to rising costs, which soared by 19%.
The metaverse branch, Reality Labs, encountered yet another severe financial setback. While it generated $285 million in revenue, the division suffered a staggering loss of $3.67 billion. However, Meta expects Reality Labs' operational deficits to increase significantly in the coming years.
The anticipated rise in expenses for Reality Labs is largely attributed to infrastructure-related costs, with a lesser impact from hardware expenses within the division.
In the last year, the company expanded its workforce by hiring 19,000 additional employees, bringing the total to over 87,000. Consequently, Meta has decided to halt new recruitment and to proceed with layoffs, particularly targeting underperforming employees.
Nonetheless, despite these financial setbacks, Zuckerberg shared some optimistic perspectives concerning the ongoing drive for revenue growth.
"Our user base continues to expand, and I'm encouraged by the strong user engagement attributed to enhancements in our discovery engine and products like Reels,\" he stated.
Zuckerberg said.
Following the public release of the quarterly earnings, the stock price fell by more than 18% in after-hours trading. It now sits at $114.20, representing a decline of 65% from the previous year.
Since rebranding to Meta, there has been a complete overhaul of the business strategy, with a pronounced focus on the metaverse and virtual reality. Yet, one must ponder if Zuckerberg's ambitions have overshot the mark. Currently, capital expenditures are exceeding $22 billion for 2022, with almost half of that earmarked for metaverse initiatives. criticized This reflects the considerable expenses tied to Meta's current operational framework and its ambitious plans for metaverse expansion.
In August, the social networking giant had already reported financial strains concerning Reality Labs for Q2, which prompted the company to issue a $10 billion bond to sustain its investment endeavors in the metaverse. posted losses Samsung US has initiated a Discord server to further enhance its presence within the growing Web3 space.
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Disclaimer
In line with the Trust Project guidelines Agne serves as a journalist focusing on the latest trends and advancements in the metaverse, artificial intelligence, and Web3 sectors for Metaverse Post. Her dedication to storytelling drives her to conduct numerous interviews with field experts, always on the lookout for compelling narratives. Agne holds a Bachelor's degree in literature and has a rich history of writing on a multitude of subjects, including travel, art, and culture. Additionally, she has volunteered her time as an editor for an animal rights organization, raising awareness about issues concerning animal welfare. You can reach her at
